Investor Contact: |
Brian Campbell |
Director, Investor Relations |
201-748-6874 |
brian.campbell@wiley.com |
| · | Full year revenue growth of 3.4% on a currency neutral basis |
| · | Full year EPS growth of 22% on a currency neutral and comparable basis |
| · | Full year EPS on a US GAAP Basis $2.15 vs. $2.49 last year, including 2008 unusual item and negative impact of FX of $0.50 per share |
| · | Revenue growth by segment, excluding FX: STMS +9%, HE +6%, P/T -10% |
| · | Free cash flow for fiscal year 2009 increased 40%; average debt declined 10% |
| Change | |||||
| $ millions | FY09 | FY08 | Excluding FX | Including FX | |
Revenue | 1,611 | 1,674 | 3.4% | (3.7%) | |
Adjusted EPS Reported EPS | 2.15 2.15 | 2.17* 2.49 | 22.0% 6.4% | (0.9%) (13.7%) | |
| · | Full year revenue +9% and fourth quarter revenue +17% on currency neutral basis (a nonrecurring acquisition accounting adjustment reported in fiscal year 2008 contributed 2% to the full year growth rate) |
| · | Full year contribution to profit +14% and fourth quarter contribution to profit +22% on a currency neutral basis |
| · | New contracts in fiscal year 2009 to publish 32 society journals; renewed or extended contracts for 87 journals; did not renew agreements to publish 9 journals |
| · | New signings: 32 journals in fiscal year 2009; 4 new journals in the fourth quarter |
| · | Renewed/extended contracts: 87 journals in FY09; 13 in the fourth quarter |
| · | Contracts not renewed: 9 journals in FY09; 4 in the fourth quarter |
| · | A new journal launch for 2010 – the Journal of Research Synthesis Methods in association with the Society for Research Synthesis Methodology |
| · | Family and Consumer Science Research on behalf of the American Association of Family and Consumer Sciences |
| · | Design Management Review and Design Management Journal with the Design Management Institute |
| · | Economic Journal and Econometrics Journal with the Royal Economic Society |
| · | Journal of Accounting Research with the Institute of Professional Accounting at the University of Chicago Booth School of Business |
| · | Cancer Science with the Japanese Cancer Association |
| · | ANZ Journal of Surgery with the Royal Australasian College of Surgeons |
| · | International Journal of Urology with the Japanese Urological Association |
| · | Journal of Neuroendocrinology with the European Neuroendocrine Association, the British Society for Neuroendocrinology, and the International Neuroendocrine Federation |
| · | Therapeutic Aphaeresis and Dialysis with The International Society for Aphaeresis, The Japanese Society for Aphaeresis and The Japanese Society for Dialysis Therapy |
| · | Journal of Philosophy of Education with the Philosophy of Education Society of Great Britain |
| · | Full year and fourth quarter revenue -10% on a currency neutral basis |
| · | Full year contribution to profit -27% and fourth quarter contribution to profit -38% on a currency neutral basis |
| · | GMAC/Official Guide to the GMAT: Wiley became the official publisher of the Graduate Management Admission Test® (GMAT®) study guides in October 2008. In March, the 12th edition of the top-selling Official Guide for GMAT Review was released worldwide. It will be followed by The Official Guide for GMAT Verbal Review and The Official Guide for GMAT Quantitative. |
| · | Meredith: In March 2009, as part of its multi-year agreement, Wiley began publishing Better Homes and Garden books and other brands such as Family Circle, as well as Food Network TV, Sandra Lee, Rocco DiSpirito, and Tyler Florence. |
| · | Kindle (Amazon): Currently, Wiley has over 9,000 P/T books available on the Kindle 2. |
| · | General Mills: Wiley and General Mills signed an agreement to renew their publishing partnership. Under the agreement, Wiley will continue to publish the flagship Betty Crocker “Big Red” cookbook and other cookbooks under the Betty Crocker, Pillsbury, and other General Mills brands. |
| · | Vancouver Olympic Organizing Committee: Wiley Canada entered into an agreement with VANOC, becoming the official publication partner of the 2010 Winter Olympic and Paralympics Games in Vancouver/Whistler. In close cooperation with VANOC, Wiley will produce commemorative books, games reports, and custom publications. |
| · | For the fiscal year, Frommers.com maintained its top position by posting 137 million page views and nearly 29 million visits. The results were lower than last year due to the economy. |
| · | Launched in November 2008, the new Dummies.com generated a total of 29 million page views by fiscal year-end, a 23% increase over prior year. Eleven million unique visitors represented a 21% increase. Users are spending 17% more time on content pages. The site now boasts 25 topic areas with 250+ pieces of content in each, 950 fully illustrated step-by-step articles, 6,610 articles, and 265 videos. |
| · | CliffsNotes.com recorded year-on-year increases of 5% in page views and 21% in unique visitors. |
| · | Business and Finance: Steve Zaffron’s and Dave Logan’s The Three Laws of Performance: Rewriting the Future of Your Organization and Your Life; Joel Comm's Twitter Power, How to Dominate Your Market One Tweet at a Time; Martin Weiss' The Ultimate Depression Survival Guide, which sold out its first print run and has hit USA Today, Wall Street Journal, and New York Times bestseller lists; and Patricia Crisafulli’s House of Dimon. Wiley Asia published five business and four finance titles in the fourth quarter. |
| · | Technology: Digital Photography For Seniors For Dummies by Mark Justice Hinton; iLife ’09 Portable Genius by Guy Hart-Davis; iLife ‘09; Twitter Tips, Tricks, and Tweets by Paul McFedries; Professional ASP.NET MVC 1.0 by Conery, et al |
| · | Consumer: Frommer’s CitySet, an exclusive eBook for the Amazon Kindle, was launched in March 2009. CitySet combines 12 Frommer’s city guides into one downloadable eBook product and is the bestselling Frommer’s eBook. Arthur Frommer’s first new book since 1995, Ask Arthur, was published in March; the 12th edition of The Official Guide for GMAT Review; Healthy Beginnings - in partnership with the Society of Obstetricians and Gynaecologists of Canada (SOGC); Every Parent’s Guide to Caring for Your Child from Birth to Age Five - in partnership with the Canadian Paediatric Society (CPS) |
| · | Architecture: Fundamentals of Building Construction, 5e by Edward Allen |
| · | Full year revenue +6% on a currency neutral basis |
| · | Full year contribution to profit -3% on a currency neutral basis |
| · | WileyPLUS revenue increased 38% year over year and now accounts for approximately 9% of global HE revenue |
| · | Now accounts for 9% of global HE revenue |
| · | Global full year billings increased 38% |
| · | Digital-only sales grew 70% |
| · | Validation/usage rates increased |
| · | WileyPLUS sales outside the US represent 15% of the total |
| · | Microsoft Official Academic Course (MOAC) revenue was up 16% over prior year. |
| · | Wiley is partnering with American Hospitality Training Institute, an online provider of hospitality training for students outside the US interested in working for US hotels and resorts. Twenty-one classes utilizing content from Barrows/Introduction to Management in the Hospitality Industry, 9e will begin in June 2009. |
| · | Wiley and Learning House agreed to create highly integrative online courses based on Wiley textbooks. The courses will be bundled with the book. We received approval for a licensing agreement for two pilot courses in world regional geography and Spanish 1. Learning House is an online education solutions partner helping small colleges and universities offer and manage their online degree programs. |
| · | Wiley expanded its partnership with Amazon to offer select Wiley textbooks for sale through the Kindle DX. Books are set to go live on the Kindle Store in the summer of 2009. |
| · | In August 2008, Wiley acquired business and modern language textbooks from Cengage Learning and mathematics and statistics textbooks from Key College Publishing. |
| · | These acquisitions contributed $7 million of revenue in fiscal year 2009, exceeding expectations. |
| · | Wiley Custom Select was successfully launched in the fourth quarter. Wiley Custom Select is a custom textbook system that allows instructors to "build" customized higher education course materials that fit their pedagogical needs, enabling users to easily find the content, personalize the material and format, and submit the order. In fiscal year 2009, custom sales increased approximately 25%. |
| · | To participate in the conference call, please dial the following number approximately ten minutes prior to the 2:30 pm EDT starting time: (877) 795-3648 |
| · | International callers may participate by dialing: (719) 325-4816 |
| · | A replay of the call will be available from 5:30 p.m. (EDT) on Thursday, June 18 through Thursday, June 25 by dialing (888) 203-1112 or (719) 457-0820 and entering Passcode 4400584. |
| · | A live audio webcast will be accessible at wiley.com> Investor Relations> Events and Presentations, or http://www.wiley.com/WileyCDA/Section/id-370238.html. A replay of the webcast will be accessible for 14 days afterwards. |
| JOHN WILEY & SONS, INC. | |||||||||||||
| UNAUDITED SUMMARY OF OPERATIONS | |||||||||||||
| FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED | |||||||||||||
| April 30, 2009 AND 2008 | |||||||||||||
| (in thousands, except per share amounts) | |||||||||||||
| Adjusted - For Tax Benefits | |||||||||||||
| Fourth Quarter Ended April 30, | Twelve Months Ended April 30, | ||||||||||||
| 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||
Revenue | $ | 403,359 | 432,391 | -7% | 1,611,390 | 1,673,734 | -4% | ||||||
| Costs and Expenses | |||||||||||||
Cost of Sales | 129,279 | 133,706 | -3% | 516,420 | 532,908 | -3% | |||||||
| Operating and Administrative Expenses | 224,444 | 240,739 | -7% | 839,648 | 876,635 | -4% | |||||||
| Amortization of Intangibles | 8,989 | 9,774 | -8% | 36,844 | 38,980 | -5% | |||||||
| Total Costs and Expenses | 362,712 | 384,219 | -6% | 1,392,912 | 1,448,523 | -4% | |||||||
| Operating Income | 40,647 | 48,172 | -16% | 218,478 | 225,211 | -3% | |||||||
| Operating Margin | 10.1% | 11.1% | 13.6% | 13.5% | |||||||||
| Interest Expense | (9,311) | (14,217) | -35% | (48,424) | (66,738) | -27% | |||||||
| Foreign Exchange Gains / (Losses) | (1,188) | (2,068) | - | (11,759) | (2,863) | - | |||||||
| Interest Income and Other, Net | 131 | 2,734 | 6,180 | 5,918 | |||||||||
| Income (Loss) Before Taxes | 30,279 | 34,621 | -13% | 164,475 | 161,528 | 2% | |||||||
| Adjusted Provision for Income Taxes (A) | 5,781 | 5,628 | 36,217 | 32,655 | |||||||||
| Adjusted Net Income (Loss) | $ | 24,498 | 28,993 | -16% | 128,258 | 128,873 | 0% | ||||||
| Adjusted Income (Loss) Per Share- Diluted | $ | 0.42 | 0.49 | -14% | 2.15 | 2.17 | -1% | ||||||
| Average Shares - Diluted | 58,975 | 59,476 | 59,610 | 59,323 | |||||||||
| Reconciliation of Non-GAAP Adjusted Financial Disclosure (Tax Benefit) | |||||||||||||
| Adjusted Net Income (Loss) | $ | 24,498 | 28,993 | 128,258 | 128,873 | ||||||||
| Tax Benefit (A) | - | - | - | 18,663 | |||||||||
| Net Income (Loss) - GAAP | $ | 24,498 | 28,993 | -16% | 128,258 | 147,536 | -13% | ||||||
| Adjusted Income (Loss) Per Diluted Share | $ | 0.42 | 0.49 | 2.15 | 2.17 | ||||||||
| Tax Benefit (A) | - | - | - | 0.31 | |||||||||
| Income (Loss) Per Diluted Share - GAAP | $ | 0.42 | 0.49 | -14% | 2.15 | 2.49 | -14% | ||||||
| (A) | The twelve months ending April 30, 2008 exclude tax benefits of $18.7 million, or $0.31 per diluted share, associated with new tax laws enacted in the United Kingdom and Germany that reduced the corporate income tax rates from 30% to 28% and from 39% to 29%, respectively. The benefits recognized by the Company reflect the adjustments required to record all UK and Germany-related deferred tax balances at the new corporate income tax rates. | ||||||||||||
Note: The Company’s management evaluates operating performance excluding unusual and/or non-recurring events. The Company believes excluding such events provides a more effective and comparable measure of performance and a clearer view of underlying trends. Since adjusted net income and adjusted earnings per share are not measures calculated in accordance with GAAP, they should not be considered as a substitute for other GAAP measures, including net income and earnings per share, as an indicator of operating performance. Accordingly, adjusted net income and adjusted earnings per share are reconciled above to net income and earnings per share on a GAAP basis. | |||||||||||||
In connection with the integration of Blackwell, the reporting of journal distribution and fulfillment costs and certain other journal development costs have been transferred from cost of sales to operating and administrative costs. All prior year periods have been restated for comparability. These changes had no impact on Wiley’s net income and EPS. | |||||||||||||
JOHN WILEY & SONS, INC. | |||||||||||||
| UNAUDITED SEGMENT RESULTS | |||||||||||||
| FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED | |||||||||||||
| April 30, 2009 AND 2008 | |||||||||||||
| (in thousands) | |||||||||||||
| Fourth Quarter Ended | Twelve Months Ended | ||||||||||||
| April 30, | April 30, | ||||||||||||
| 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||
| Revenue | |||||||||||||
| Scientific, Technical, Medical and Scholarly | $ | 272,784 | $ | 279,460 | -2% | 969,184 | 975,797 | -1% | |||||
| Professional/Trade | 97,038 | 114,526 | -15% | 412,674 | 471,785 | -13% | |||||||
| Higher Education | 33,537 | 38,405 | -13% | 229,532 | 226,152 | 1% | |||||||
| Total | $ | 403,359 | $ | 432,391 | -7% | 1,611,390 | 1,673,734 | -4% | |||||
| Direct Contribution to Profit | |||||||||||||
| Scientific, Technical, Medical and Scholarly | $ | 122,426 | $ | 119,144 | 3% | 399,156 | 384,170 | 4% | |||||
| Professional/Trade | 17,220 | 32,281 | -47% | 94,620 | 136,619 | -31% | |||||||
| Higher Education | (7,352) | 3,689 | -299% | 61,677 | 68,270 | -10% | |||||||
| Total | $ | 132,294 | $ | 155,114 | -15% | 555,453 | 589,059 | -6% | |||||
| Shared Services and Administrative Costs | |||||||||||||
| Distribution | $ | (27,965) | $ | (27,780) | 1% | (112,961) | (116,147) | -3% | |||||
| Technology Services | (24,021) | (27,818) | -14% | (93,413) | (95,412) | -2% | |||||||
| Finance | (12,116) | (15,875) | -24% | (45,937) | (49,684) | -8% | |||||||
| Other Administration | (27,545) | (35,469) | -22% | (84,664) | (102,605) | -17% | |||||||
| Total | $ | (91,647) | $ | (106,942) | -14% | (336,975) | (363,848) | -7% | |||||
| Operating Income | $ | 40,647 | 48,172 | 218,478 | 225,211 | ||||||||
Note: During fiscal year 2008, the Company began developing a global organizational structure encompassing the Company’s three core businesses: Scientific, Technical, Medical and Scholarly, Professional/Trade and Higher Education. This global organizational structure will enhance the Company's ability to leverage content, services and capabilities around the world to better serve authors, society partners and customers. Previously, the management structure was organized geographically. | |||||||||||||
As of May 1, 2008, the beginning of the Company’s 2009 fiscal year, the transition of all operational and financial systems necessary to support a global organization were finalized. As part of this process, the impact on business segment reporting was evaluated and changed to conform with the requirements of SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information.” The Company will continue to report financial data for shared service functions which are centrally managed for the benefit of the three global businesses, including Distribution, Technology Services, Finance and Other Administration. The changes in segment reporting will enable investors to view the performance of the Company in the same way as management assesses business performance. Accordingly, all prior year segment data reported in the Company’s financial statements has been restated for comparability. | |||||||||||||
In connection with the integration of Blackwell, the reporting of certain accounts within segment reporting were realigned as follows: journal distribution and fulfillment costs were moved from direct costs to Shared Service - Distribution; certain operational incentive compensation costs were moved from Shared Service - Other Administration to direct costs; and certain finance costs were moved from direct costs to Shared Service - Finance. In addition, certain product lines were realigned in the Unaudited Segment Results to correspond with management responsibility. All prior year periods have been restated for comparability. These changes had no impact on Wiley’s net income and EPS. | |||||||||||||
JOHN WILEY & SONS, INC. UNAUDITED CONDENSED STATEMENTS OF FINANCIAL POSITION (in thousands) | ||||
| April 30, | ||||
| 2009 | 2008 | |||
| Current Assets | ||||
| Cash & cash equivalents | $ | 102,828 | 59,311 | |
| Accounts receivable | 178,550 | 212,158 | ||
| Inventories | 111,267 | 118,209 | ||
| Deferred income tax benefits | 844 | 3,651 | ||
| Prepaid and other | 46,080 | 41,652 | ||
| Total Current Assets | 439,569 | 434,981 | ||
| Product Development Assets | 89,662 | 95,126 | ||
| Property, Equipment and Technology | 141,196 | 145,709 | ||
| Intangible Assets | 919,375 | 1,120,398 | ||
| Goodwill | 589,993 | 708,233 | ||
| Deferred Income Tax Benefits | 14,065 | 29,136 | ||
| Other Assets | 29,848 | 42,632 | ||
| Total Assets | 2,223,708 | 2,576,215 | ||
| Current Liabilities | ||||
| Accounts and royalties payable | 160,275 | 189,332 | ||
| Deferred revenue | 246,584 | 303,231 | ||
| Accrued income taxes | 4,281 | 1,633 | ||
| Accrued pension liability | 2,483 | 2,499 | ||
| Other accrued liabilities | 115,844 | 136,867 | ||
| Current portion of long-term debt | 67,500 | 45,000 | ||
| Total Current Liabilities | 596,967 | 678,562 | ||
| Long-Term Debt | 754,900 | 797,318 | ||
| Accrued Pension Liability | 90,621 | 82,755 | ||
| Other Long-Term Liabilities | 91,292 | 100,421 | ||
| Deferred Income Taxes | 176,412 | 228,041 | ||
| Shareholders' Equity | 513,516 | 689,118 | ||
| Total Liabilities & Shareholders' Equity | $ | 2,223,708 | 2,576,215 | |
| JOHN WILEY & SONS, INC. | ||||
| UNAUDITED STATEMENTS OF FREE CASH FLOW | ||||
| (in thousands) | ||||
| Twelve Months Ended | ||||
| April 30, | ||||
| 2009 | 2008 | |||
| Operating Activities: | ||||
| Net income | $ | 128,258 | 147,536 | |
| Amortization of intangibles | 36,844 | 38,980 | ||
| Amortization of composition costs | 43,767 | 43,613 | ||
| Depreciation of property, equipment and technology | 35,134 | 33,330 | ||
| Special non-cash tax benefits | - | (18,663) | ||
| Stock-based compensation (net of tax) | 10,625 | 17,475 | ||
| Excess tax benefits from stock-based compensation | (5,350) | (11,223) | ||
| Pension expense, net of contributions | (2,696) | (36,466) | ||
| Non-cash charges and other | 106,671 | 75,303 | ||
| Change in deferred revenue | 2,430 | 37,697 | ||
| Net change in operating assets and liabilities | (14,428) | (47,447) | ||
| Cash Provided by Operating Activities, excluding acquisitions | 341,255 | 280,135 | ||
| Investments in organic growth: | ||||
| Additions to product development assets | (131,666) | (113,069) | ||
| Additions to property, equipment and technology | (46,009) | (50,315) | ||
| Free Cash Flow | 163,580 | 116,751 | ||
| Other Investing and Financing Activities: | ||||
| Acquisitions, net of cash | (23,960) | (6,802) | ||
| Repayment of long-term debt | (618,512) | (1,049,360) | ||
| Borrowings of long-term debt | 598,594 | 891,476 | ||
| Change in book overdrafts | (20,522) | 36,253 | ||
| Purchases of treasury stock | (35,110) | (3,679) | ||
| Cash dividends | (30,478) | (25,614) | ||
| Proceeds from issuance of stock on option exercises and other | 11,623 | 15,191 | ||
| Excess tax benefits from stock-based compensation | 5,350 | 11,223 | ||
| Cash (Used for) Provided by Investing and Financing Activities | (113,015) | (131,312) | ||
| Effects of Exchange Rate Changes on Cash | (7,048) | 2,379 | ||
| Increase in Cash and Cash Equivalents for Period | $ | 43,517 | (12,182) | |
| RECONCILIATION TO GAAP PRESENTATION | ||||
| Investing Activities: | ||||
| Additions to product development assets | $ | (131,666) | (113,069) | |
| Additions to property, equipment and technology | (46,009) | (50,315) | ||
| Acquisitions, net of cash | (23,960) | (6,802) | ||
| Cash Used for Investing Activities | $ | (201,635) | (170,186) | |
| Financing Activities: | ||||
| Cash (Used for) Provided by Investing and Financing Activities | $ | (113,015) | (131,312) | |
| Less: | ||||
| Acquisitions, net of cash | (23,960) | (6,802) | ||
| Cash (Used for) Provided by Financing Activities | $ | (89,055) | (124,510) | |
Note: The Company’s management evaluates performance using free cash flow. The Company believes free cash flow provides a meaningful and comparable measure of performance. Since free cash flow is not a measure calculated in accordance with GAAP, it should not be considered as a substitute for other GAAP measures, including cash used for investing activities and financing activities, as an indicator of performance. | ||||
